How Philanthropy Can Support Both Family Governance and Legacy


Welcome to Let’s Talk Family Enterprise, a podcast that explores the ideas, concepts and models that best serve Family Enterprise Advisors (FEAs) in supporting their clients.

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Guest host Steve Legler speaks with Dr. Sharilyn Hale, President, Watermark Philanthropic Counsel, to learn ways that Canadian families are effectively using philanthropy to create meaningful multi-generational legacies.

Let’s talk family enterprise explores global ideas, concepts and models that help family enterprise advisors better serve their family clients, brought to you by the family enterprise exchange.

All these Information and opinions expressed during this podcast are solely those of the individuals involved and do not necessarily represent those family enterprise exchange or its employees.

Hello, and welcome to another episode of The let’s talk family enterprise podcast. My name is Steve Legler and I’m excited to be your guest host once again. Today we’re gonna be talking about family philanthropy, and we found the ideal guest to share her thoughts and expertise on how Canadian families have been using philanthropy as part of their overall family governance activities. That guest is Dr. Charlotte Hale of watermark philanthropy Council in Toronto. I’ve run across a number of philanthropy advisors in my work, but Sherilyn is the first Canadian that I encountered in this space. I connected with her on LinkedIn first set up a call with her, learned that she’s also interested in doing the FBA program and immediately knew that she would make a great guest for us on the podcast. I’m looking forward to this discussion. So why don’t I introduce our guests, Charlotte Hale, welcome to the let’s talk family enterprise podcast. We’re so happy to have you as our guest. Okay. I’m

happy to be chatting with you today, Steve. All right.

I think it’s important to just take a few minutes at the outset, to set the context of your experience in this space too. So if you could give us a background on how you got into this work, and then a little bit about your doctoral work. On Canadian family philanthropy.

Thank you. I spent most of my professional career in the charitable sector before starting my firm, Watermark philanthropic council about almost 10 years ago with a real desire to support generous people, people who wanted to give who want to do well with the resources that they have. And the last number of years though, it’s been such a wonderful learning journey for me with the families, individuals and couples that I’ve had the privilege of working with. Reference my doctoral work, which I started few years ago and completed my research at the end of last year on family philanthropy governance, and it was a very fascinating journey for me, both combining my professional consulting work with my academic journey and really being able to connect and combine practice with theory and learned a tremendous amount from the families that participated in my study, which I think will come out in some of our conversation today. I think philanthropy is such a wonderful touch point within families about what they care about who they are, and what they want to accomplish in the world. And so I find my work tremendously meaningful.

Awesome, you know, my view on family business and the relationship to philanthropy has evolved so much since I when I got into the MBA program in 2013. You know, I heard people talking about philanthropy for family business and I thought well that’s nice families are made a lot of money they want to give some back you know, it since then it’s it’s a whole bunch of things have opened my opened my eyes to the way that I guess you’re talking about family governance or for philanthropy governance, which in ways is a doorway to family governance in general. Can you shed a little more later on on that aspect?

I think firewall governance, is it an emerging area for many families. So some have very sophisticated governance models and practices in place others are kind of aware all too well that perhaps they need some more family governance. What I have observed both in my research and in my work with families, is that governance of family philanthropy can really be such a wonderful entry point to either introduce concepts of of how how to work together as a family, how to engage how to make decisions. And for those who already have fairly savvy, family governance. I think philanthropy can be a way to enhance and deepen the practices that are already present. One of the things that I had to distinguish in my in my research you know, I’d come from a also doing governance, consulting, corporate governance. And in families, governance can look a bit different and there are principles that are are relevant. But in the family context, it is very distinct. But fundamentally, it’s how do we as a group of people who are connected, how how do we organize ourselves in order to make good decisions? And so philanthropy can really provide a framework that will help the family be successful help them to learn and grow. I often talk about the benefit of family philanthropy governance is having, having advantages for the family impacting the family, but also impacting the community.

Yeah, well, see, that’s what a lot of people see the community benefits of it. So those on the receiving end, but even in the activity of organizing the family, and I know people don’t really love the word governance, but like the way you have talked about how they make decisions together, how they communicate how they organize, and how philanthropy can be a great entryway into these sorts of discussions. And it’s also an entryway for some members of the family that don’t otherwise necessarily get involved in some of this stuff. Isn’t it?

So it was so typically, in families who have a family enterprise, some, some or none or all the family members can be engaged in in the enterprise. And so there there are many different combinations of what that looks like. And for many of the families that I have worked with philanthropy, is that that common meeting place that common ground, where where, you know, perhaps people who are not engaged in the business can participate and feel like they’re making a meaningful contribution in the life of the family and I think that that’s very significant. I have also seen, certainly this was the case with one of the families in my in my research, the the family, philanthropy became a very important anchor for the family when they sold their business. So pretty much all members of the family were engaged in the business. And when when that was sold, they kind of looked around at each other and some people they moved outside of the geographic area that they were and they wanted something that could keep the family together. And it has served that purpose in quite a meaningful way.

You talked about families where some of the members are in the business and some are not and that is always a challenge for us advisors when we work with with a business family that there’s this sort of information asymmetry and this power imbalance between those on the inside and those on the outside. And that example you just gave almost feels to me like it was one where the advantage flipped from maybe folks that were involved in the business and the business is sold and the ones who might have been involved in the philanthropy now all of a sudden, had more of established home field advantage and things. It’s really interesting how these different things can evolve. And that’s bringing me to the question about you know, there are no cookie cutter solutions. There’s no way to say oh, here, here’s this box called philanthropy. Let’s go and introduce it to this family and bolted on and it’s going to fix everything so so what can we learn from the families that you’ve studied? Given the fact that there is no one size fits all what are some of the things that we can learn that some of that some of us advisors who work with families can maybe introduce or bring to our families that we work with, that might help them to use this to their advantage?

And my research actually identified a number of I call them governance differentiators. So what are the elements that actually inform the choices that families make about how they’re how they are going to approach philanthropy? I think the driving one and this is a good takeaway for all families, but also all advisors who are supporting families. Is what are the goals? What are the objectives? What do they what does the family want to accomplish? Through their through their giving through their collective philanthropy? What do they want that to look like? And that can be different for every family. It can be cohesion, right unity keeping, keeping that sense of family nests together, it could be around the maturation and development of the next generation. It could be around legacy. And so really, really honing in on what are the goals and objectives is critical. Family complexity is also a differentiator. You know, even you know, how do you define family, I think is a very interesting and pertinent conversation.

Yeah, these days. It’s getting more complex all the time.

It is what is a family who counts. Families come together in so many different ways today that that are meaningful and legitimate, and but how is that reflected in in how a family comes together to make decisions who who counts who’s who’s allowed to participate, who’s not and are very practical level, how the size How big is the family? You know, a two generation family is very different than a four or five, multi branch, family and so the governance needs to be right sized. The life stage and generational levels of a family are things that need to be considered. Certainly, as well as the structures how are they going to give you know, are they wanting to use a private foundation are they wanting to use donor advised funds? Are they giving $20 million a year or are they getting $500,000 a year? All of these factors are things that need to be considered. I would say the the biggest takeaway for me from my own research is that every family has has the the agency and the duty to develop their own governance model that is relevant to their family. It really has to emerge from from the family and that’s what advisors are skilled at. Right? It’s helping helping a family have, have the kinds of conversations ask the kinds of questions that will shape and inform their thinking so that the structure and the approaches that they set up suit them, but then they can also evolve, right? So families are always changing, you know, someone will die. New Kids will be born there’s a marriage, there’s a divorce, there’s and so when we think about governance, I think about an evolving, living, breathing system that needs to suit suit the family. And so what their objectives are, and they saw some tremendous examples of that in my research.

So the life you have the life stage of the individuals, and then you have the generational stage of the family and its complexity, and so it’s somehow the family members need to come together and figure this out for themselves, but not necessarily by themselves, right so advisors can help them figure that out. And then once they set it up for what works for today, they also have to be cognizant of the fact that a few years down the road things might change, and they might want to change the way they had it set up before so they almost have to already, you know, pre register the fact in their heads that this needs to be able to be evolutionary and evolve with the times and with the size of the family and with the priorities effect.

I referenced in my study the balance between inheritance and co creation. And you know, anyone who works with with families, you know, you’re familiar with, what is the family inheriting from those who have come before, right? It’s not in the case of philanthropy. It’s not always just about money or business, and its values, its stories, its ways of being, ways of showing up in the world and how decisions are made. And so you know what we inherit from our families and families is incredibly important. But relative to philanthropy and governance, there also needs to be that co creation, you’re bringing from the past, you’re honoring that you’re taking what suits but then it’s critically important that those around the table those who are going to participate, also have the opportunity to co create together so that everyone can can see themselves in the output. Right and one of the things that you know, I have observed and that can happen is if there’s a patriarch or matriarch the wealth creator, who is not perhaps quick to let go and you know, they want to control the decisions, even though you know, they they have a family foundation and name and family members come and sit at the table. And yet they can’t they can’t meaningfully engage and there’s no point of entry, and that that is demoralizing for those who have been asked to be at the table. But I think it can also truncate issues of legacy. And what what a wealth creator or a leader of a family wants to pass pass on. What I have observed about the most successful families, certainly the families in my study is that you know, they were eager to get that engagement. around the table to patriarchs, they were the wealth creators and their families. And they very much wanted to build and cultivate a sense of ownership, responsibility, accountability in the world. And they wanted that sense of Abyan, you know, looking at succession for the future. They wanted to start to build that in they had high degrees of social capital. That also helped to augment their ability to do this, but I think that that that is such a critical point. Being able to inherit things from the past, but to be able to co create something that is new and relevant, and where all those who are going to participate can really find a meaningful spot. Otherwise, what’s the point?

Well, and so when you talk about these you know, wealth creators and founders and patriarchs who like to hold on to everything, and they, you know, they keep the power that they have and let go of it very reluctantly. And yet the family philanthropy with the co creation part really, it’s more of a you need to set up more democratic decision making and more of a peer to peer thing with different people from different generations versus the power position. So I imagine that advisors can be a big benefit to these people that that might not let go so easily. And maybe the argument is, you have the power position in the business circle, maybe you need to surrender a little bit of it in the philanthropy circle. Is that is that one of the ways that we can benefit our clients by offering that perspective?

I think that can certainly be a meaningful entry point. And I think it can also be incremental, right, incremental change over time is better than not a no change. And often, you know, probing again, what are what are the hopes, what are the fears, what are the aspirations those types of conversations and an exploration can can really help reframe, you know, certainly for the leader of a family, how they want to go about approaching philanthropy together as a family. I think it also I mean, it’s relevant to point out that you know, whatever is is developed, it has to be developmentally appropriate. Also, so, you know, one of the families in my study, they started their family philanthropy together, when their kids were adolescents, right. And each each kid had an allocation of money and they were responsible for doing research, you know, making a phone call when they got a little older to you know, go out, do a do a visit with the organization, do their research, and once a year, the family gets together and each each child would do a little presentation on what their gift was going to be that year, the organization or the cause that they selected as their kids matured and got older, the quantum of the dollars increase, but also their sophistication around, you know, their decision making and the kinds of questions that they asked how they went through their exploration process. And today, you know, their kids are in their 20s and they’re very savvy philanthropists. They’re deeply engaged in the community, and they’re making six figure gifts. And and you know, very much more sophisticated giving, if you will, and you know, so So again, the governance grew with the evolution of the family, in line with the objectives that the family would have. I think their example is also interesting because often when people think about family philanthropy, they think, okay, the family has to come around the table and everyone has to agree. Every grant and oh my goodness, we don’t agree on a lot. How are we ever going to do this? You know, that that is one model. Not all families need that model or root that model. In the case of this family that I’ve just cited, they actually don’t make collective decisions in terms of you know, this is a grant from the family as a whole. Now, the parents do that together as a couple. And yet, they have such a rich experience of philanthropy and of community engagement in their cans. And in their parents. And so, so I think it’s important to to just highlight that example because how families actually make decisions can look very different. But But suit the needs. Lastly, I’ll cite in that family, the parents also use their own giving as a model for their kids as they were growing up. Their parents were not are not only major donors in the community, and making major gifts, but every one of those gifts they shared with their kids. You know, how did it come about? Why this organization? How did they structure the gift? What were their intentions for the gift for those kids growing up? What a wonderful legacy to have a front row seat for their their parents thinking and intent behind their philanthropy. That is just such a powerful example for for how philanthropy can can really strengthen a family, let alone the community.

So they modeled exactly what they were doing, but they did not then create a structure in which their kids were expected to conform to what they were doing. They were just saying, This is how we’re doing it. And now by the way, here’s some money for you to do it. And you do it your own way. So that’s that collective giving, which can be great. But can be constraining. Then there’s the individual giving, which can be empowering for each person. And then there’s any combination that a family could do so I can imagine some families have one common pot that they decide together and then other individual allocations that individuals do. So there’s no again we’re back to the there’s no one size fits all. You talked about the adolescence and I know when when people talk about getting the kids involved one of the main major questions as always COVID what age should you start what age should you start and I usually my answer is usually if you think it’s it could be time to start you could probably get started but is there is there Do you have a better answer than me on some of this?

You know, like anything with with kids, they they are sponges and they absorb and they learn you know, I have interviewed so many people over the course of my career, either either formal interviews or conversations with people about, you know, what motivates them, what inspires their philanthropy, you know, where does their desire to give come from? And there are some exceptions, but most often, they will reflect back on a parent or a grandparent, or someone else who’s very special in their life, who cared about others. Fundamentally, for me, that’s a that has been a very powerful takeaway. I have a five year old daughter and you know, she has a gift jar. Right there. There’s lots of strategies and ways to highlight and point out and plant those seeds in little people so that they it becomes internalized, and they see it,

it becomes part of the expectation that this is how we do things in our family and we are, we are lucky to be in a position to be able to give some back and we think it’s important to do it and this is how we do it. And the kids watch and learn and I guess we’ve come a long way from you know, guy gets rich sets up a family foundation and then makes sure his kids show up at the cocktail parties fundraisers and smile and you know, care and they’re being forced into you know, playing the role of that family member but but there’s a lot more that families can do are doing and could do and continue to do. Do you have any other examples of families that you really want to share of interesting things? That that some families have done as we get towards the end of our time together,

you know, an emerging trend in Canada. The US is further ahead. And we are here but the rise of donor advised funds and I think you know one of the things we often hear about no families who have the capacity to give significantly they all have a private foundation. private foundations are one tool, one vehicle or structure. There are others. You know, my study a family who gives significantly you know, they have a private Family Foundation for Individual Family Member giving and a large donor advised fund for their collective family giving and you know, interesting reasons why they choose you have chosen that structure. But I think you know, as we think about families decision making, philanthropic structures, intergenerational dynamics, succession, the wealth transfer all of these things coming together, we know that doing good is viewed much more broadly these days and certainly for, for for younger donors in their 20s and 30s. Understanding how they’re showing up in the world is a is a way that they express their their care

These days and certainly for, for for younger donors in their 20s and 30s. Understanding how they’re showing up in the world is that is a way that they express their their care and their compassion and therefore entropy. And so as we think about all of these other factors, you know, mapping out the full range of assets that a family has to give, identifying the purpose or values or objectives and then building structures around that. I think that’s what savvy advisors are looking to do with families to really help them think in the broadest strokes about the good that they can do in the world. And certainly traditional philanthropy is a is a key anchor to that, but it’s one it’s one tool in their toolbox.

And so what’s something that just came to my head as you were talking about the different vehicles, there are different styles or or or structures that families can use, depending on the complexity and the level of wealth and I get the feeling and I’m guessing that some of our listeners, the advisors deal with certain families that if they bring up the word philanthropy to their clients, the those clients might think, oh, that’s for people who have billions of dollars and who want to give, you know, and really, I think the message we can bring them is there are appropriate structures for every level, and that the work that this enables you to do as we’ve been discussing within the family, governance wise, that work you do with your family members, if you add three zeros or take off three zeros, it’s the same work and you can get the same benefit out of it, regardless, and so even families that might not ordinarily have viewed themselves as philanthropic. They don’t need to have millions of dollars to get started and get some of these benefits. So I’m guessing that’s one of the messages we could be and should be bringing to our clients.

Yeah, absolutely. One of the key takeaways from from my study with philanthropic families in Canada, is that, you know, they care about each other very deeply. They care about their identity as a family. They’re in their history, and their values as a family. They care about accountability to themselves as individuals, to each other as a family and to their broader community and they care about the impact of their giving. I think those are really wonderful anchors for any family, giving at any level of ways to orient your your thinking and how, how you want to choose to live your life and how you want to grow your family.

Fantastic. And and, you know, as usual, the time has been flying by as I record these things, and we’re getting to the wrap up point. So I need to ask you our standard two final questions. I’m going to need a book recommendation from you and then one piece of advice from an advisor to other advisors. So do you have a book recommendation that you’d like to share with us please

go and do I recently finished reading humble inquiry, the gentle Art of Asking instead of telling and that’s by Edgar Schein, who is very well known organizational development expert scholar. Professor, I have spent a fair amount of time researching organizational development. It’s a it’s a body of knowledge that I draw on tremendously in my in my work because families meet the definition of organization, families or their own organization and there’s a lot that is relevant. But this book in particular, is calling on all of us to really shift from having a culture of telling, which is very easy to do as a consultant to a culture of inquiring and asking questions being genuinely curious, and asking questions for things that that we genuinely don’t know the answer to. And not questions that are kind of leading questions or rhetorical questions. And Cheyenne makes the point in this book that when we do that, we we move forward with very trustful relationships and relationships are always at the core of any consulting relationship. They’re also at the core of our families.

I love it. I’m a big I’ve been a fan of Edgar shines work for a while and his latest few that all have humble in the title, book consulting and humble inquiry. And interestingly enough, he’s almost doing like the family business thing, his last few books because I think he’s like in his 80s Now, he’s been co writing with his son. Okay, so, so 93 And he’s been he’s been co authoring his last few books with his son. So that’s a family business. So we’ll put a link to that book in the in the show notes. And so now one more thing from you, please Cherylin a piece of advice from advisors to other advisors who are FBA community that generally are the ones who listen to this podcast.

I don’t think any of your listeners would do this, but I would say just don’t discount philanthropy as just kind of a charity stuff over there. And you know, if someone gets to it, they get to it. You know, to really view it as a as a meaningful entry point for conversations that will add value to what you’re able to offer the family and a platform for exploration. Right. And I believe that that would lead to greater good for the family and greater good to the community.

Awesome. Charlotte, thanks again for joining us for this podcast and for sharing so much about how Canadian families are looking at philanthropy as part of their family governance and legacy. I think we all learned a lot today. So thanks again for your insights. My pleasure. Thank you, listeners. If you haven’t already subscribed to this podcast, please do so. So you can make sure you never miss any of these monthly episodes. This has been the let’s talk family enterprise podcast. Thanks again for joining us. I’m Steve Legler. And we’ll see you again next time.

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